1. CMP 143.00
Target Price 165.00
ISIN: INE752E01010
JUNE 11th
, 2015
POWER GRID CORPORATION OF INDIA LTD
Result Update (PARENT BASIS): Q4 FY15
BUYBUYBUYBUY
Index Details
Stock Data
Sector Power
BSE Code 532898
Face Value 10.00
52wk. High / Low (Rs.) 159.00/121.00
Volume (2wk. Avg. Q.) 1858000
Market Cap (Rs. in mn.) 748117.37
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY15A FY16E FY17E
Net Sales 171772.30 190151.94 208406.52
EBITDA 153541.10 170472.29 187308.45
Net Profit 49791.70 55565.82 60942.94
EPS 9.52 10.62 11.65
P/E 15.02 13.46 12.28
Shareholding Pattern (%)
1 Year Comparative Graph
POWER GRID CORP INDIA LTD BSE SENSEX
SYNOPSIS
Power Grid Corporation Of India Limited own and
operate more than 116117 Ckt. kms network of
transmission lines, 233209 MVA transformation
capacity and 193 nos. substations.
The company’s net sales grew by 18% y-o-y and stood
at a record of Rs. 47032.20 million for Q4 FY15
compared to Rs. 39862.80 million for the
corresponding quarter last year.
In Q4 FY15, net profit of the company stood at Rs.
14124.80 million, an increase of 20.13% y-o-y against
Rs. 11758.40 million in Q4 FY14.
Profit before interest, depreciation and tax was at Rs.
42647.90 million in Q4 FY15 as against Rs. 35804.60
million in the corresponding period of the previous
year.
The company has recommended final dividend @
13.1% i.e., Rs. 1.31/- per share on face value of Rs.
10.00/- each for the financial year 2015.
Investment approved by the company for Creation of
400 / 220kV Substations in NCT of Delhi during 12th
Plan Period (Part-B1)' at an estimated cost of Rs.
7803.30 mn.
The company approved, Investment for Transmission
System for Ultra Mega Solar Park in Anantpur District,
Andhra Pradesh - Part A (Phase-I)’ at an estimated
cost of Rs. 3129.40 mn.
Power Grid Corporation of India Ltd has acquired
‘Vindhyachal Jabalpur Transmission Ltd’, the Special
Purpose Vehicle on February 26, 2015.
Net Sales and PAT of the company are expected to
grow at a CAGR of 13% and 10% over 2014 to 2017E
respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
Power Gird Corporation of India Ltd 143.00 748117.37 9.52 15.02 1.96 20.00
PTC India Ltd 69.15 20469.00 6.86 10.08 0.75 22.00
Tata Power Company Ltd 76.10 205822.00 3.74 20.35 1.44 130.00
NTPC Ltd 138.65 1143233.60 12.48 11.11 1.33 25.00

2. QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results updates- Q4 FY15,
Power Grid Corporation of India Limited
(POWERGRID) is one amongst the largest Power
Transmission utilities in the world. The Company
has reported its financial results for the quarter
ended 31st March, 2015.
The company has recorded a turnover of Rs. 47032.20 million for the 4th quarter of the financial year 2015 as
against Rs. 39862.80 million in the corresponding quarter of the previous year. EBITDA increase by 19.11% y-o-y
of Rs. 42647.90 million against Rs 35804.60 million in the prior period Last year. In Q4 FY15 net profit stood at
Rs. 14124.80 million, an increase of 20.13% y-o-y against Rs. 11758.40million in Q4 FY14. The company has
reported an EPS of Rs. 2.70 for the 4th quarter of financial year 2015 as against an EPS of Rs. 2.25 in the
corresponding quarter of the previous year.
Break up of Expenditure
During Q4 FY15, Total expenditure rose up by 23 percent mainly on account of Employee Benefit Expenses by
20% Transmission, Administration & other expenses by 17%, and Depreciation & Amortization expenses by 32%
are the main attributes for the growth of expenditure when compared to corresponding quarter of previous year.
Total expenditure stood at Rs. 20628.30 million in Q4 FY15 as against Rs. 16782.10 million in Q4 FY14.
Rs. In millions Mar-15 Mar-14 % Change
Net Sales 47032.20 39862.80 17.99
PAT 14124.80 11758.40 20.13
EPS 2.70 2.25 20.13
EBITDA 42647.90 35804.60 19.11
Break up of Expenditure
(Rs. In millions)
Q4 FY15 Q4 FY14
Employee Benefit Expenses 2815.00 2342.60
Depreciation & Amortization
Expense
14180.60 10750.30
Transmission, Administration &
Other Expenses
3879.90 3320.60

3. Segment Revenue
Latest Updates
The company has approved the following:
1. 'Investment approval for Creation of 400 / 220kV Substations in NCT of Delhi during 12th Plan Period
(Part-B1)' at an estimated cost of Rs. 7803.30 mn, with commissioning schedule of 26 months to be
reckoned from the date of receipt of confirmation from the Govt, of NCT of Delhi regarding allotment of
land for Tughlakabad sub-station;
2. ‘Investment approval for Transmission System for Ultra Mega Solar Park in Anantpur District, Andhra
Pradesh - Part A (Phase-I)’ at an estimated cost of Rs. 3129.40 mn, with commissioning schedule of 12
months from the date of investment approval with best efforts matching with the commissioning of
associated solar power plant; except that +/-100 MVAR STATCOM at NP Kunta Pooling Station will be
delivered along with Phase - II of the project.
Power Grid Corporation of India Ltd has acquired ‘Vindhyachal Jabalpur Transmission Limited’, the Special
Purpose Vehicle on February 26, 2015 from REC Transmission Projects Company Limited (the Bid Process
Coordinator). The transmission system comprising 765kV D/C transmission line is to traverse the State of
Madhya Pradesh and is to be constructed over a period of 40 months.
The company has recommended final dividend @ 13.1% i.e., Rs. 1.31/- per share on face value of Rs. 10.00/-
each for the financial year 2015.
Acquisition of Gadarwara (A) Transco Limited and Gadarwara (B) Transmission Limited by POWERGRID
Corp of India Ltd under Tariff Based Competitive Bidding.

4. The company has accorded investment approvals for:
1. Creation of 400/220kV Substations in NCT of Delhi during 12th Plan Period (Part-A) at an estimated cost
of Rs. 13945.20 mn, with commissioning schedule of 26 months from the date of investment approval.
2. Sub-Station extension works associated with Eastern Region Strengthening Scheme - VII (ERSS-VIl)’ at an
estimated cost of Rs. 713.50 mn, with commissioning schedule of 24 months progressively from the date
of investment approval with best efforts matching with the completion of associated transmission lines
being implemented under Tariff Based Competitive Bidding;
3. Substation Works associated with Hyderabad (Maheshwaram) Pooling Station’ at an estimated cost of Rs.
5500.60 mn, with commissioning schedule of 36 months progressively from the date of investment
approval.
4. Transmission System associated with Solapur STPP (2x660MW) Part-A project of NTPC (Part-A)’ at an
estimated cost of Rs. 505.20 mn, with commissioning schedule of 24 months from the date of investment
approval.
COMPANY PROFILE
POWER GRID CORPORATION OF INDIA LIMITED (POWERGRID), the Central Transmission Utility (CTU) of the
country under Ministry of Power is one amongst the largest Power Transmission utilities in the world. In October
1992, the National Power Transmission Corporations name was changed to Power Grid Corporation of India
Limited.
POWERGRID is a ‘Navratna’ Company and the ‘Central Transmission Utility (CTU)’ of the country. An innovation
in Technical & Managerial fields has resulted in coordinated development of power transmission network and
effective operation and management of Regional and National Grid.
Power System Management
The company core business is the transmission of electric power. As on 30th April 2015, company own and
operates more than 116117 Ckt kms network of transmission lines, 233209 MVA transformation capacity
and 193 nos. substations that constitutes most of India’s interstate and inter-regional electric power
transmission system and carries electric power across India. Total Inter-regional power transfer capacity is
~46,450 MW.
Telecom
POWERGRID with its brand name ‘POWERTEL’ in Telecom business is the only utility in the Country having
overhead optic fibre network using Optical Ground Wire on power transmission lines. POWERGRID has an all
India Broad Band Telecom Network of about approx 33241Kms.

5. New Business Opportunities
Smart Grid/Smart City
Green Energy Corridors
Energy Efficiency
Intra State Transmission
Desert Power India
Electrical Vehicle
Distribution (Wire Business)
Business Segments
• National Long Distance
• Internet Service Provider
• Infrastructure Provider
International Business
International Business Department is created with the objective to spread POWERGRID’s engineering
services in Power Transmission Business across the world.
Global Consultant
Through implementation of huge transmission networks in India and abroad and by adopting latest
technology in multifarious topology and environment, POWERGRID has emerged as a renowned consultant
in Power Sector globally.
POWERGRID has been entrusted with more than 300 consultancy assignments in India and 45 assignments
other countries and provides consultancy in the areas – Transmission; Distribution/Rural
Electrification/Sub-transmission; Load Despatch & Communication; Grid Management; Telecom & Smart
Grid.
POWERGRID has consultancy and projects execution experience in following countries: Afghanistan,
Bangladesh, Bhutan, Ethiopia, Nigeria, Nepal, Kenya, Myanmar, Srilanka, Tajikistan, UAE
Services
a) System Engineering & Feasibility Studies
b) Environmental & Social Impact Assessment
c) Design and Engineering
d) Contract Services

6. e) Project Management and Construction
Supervision
f) Owner's & Lender's Engineer
g) Other Service
Domestic Consultancy
POWERGRID has a large network of primary transmission system of 168 EHV substations and over 100600
circuit kms of transmission lines. Building upon its un-matched techno-managerial excellence in various
fields of power system, POWERGRID has been providing one stop consultancy services to State owned
utilities, Private utilities, Central Public Sector Undertakings and Government departments.
Joint Ventures
• Power links Transmission Ltd
• Torrent Power Grid Ltd
• Jaypee Power Grid Ltd
• Parbati-Koldam Transmission Company Ltd
• North-East Transmission Company Ltd
• Teesta valley Power Transmission Ltd
• National High Power Test Laboratory Pvt.
Ltd
• Energy Efficiency Services Ltd
• Kalinga Bidyut Prasaran Nigam Private Ltd.
• Power Transmission Company Nepal Ltd.
(1st International JV )
• Bihar Grid Company Limited.
• Cross Border Power Transmission Company
Ltd.
Subsidiaries
• Power System Operation Corporation Ltd (POSOCO).
• Vemagiri Transmission System Ltd (VTSL).
• Nagapattinam – Madhugiri Transmission Company Ltd (NMTCL).
• Vizag Transmission Ltd.
• Unchahar Transmission Limited.
• NRSS XXXI (A) Transmission Limited.
• Vindhyachal-Jabalpur Transmission Limited.
• Gadarwara(A) Transco Limited.
• Gadarwara (B) Transmission Limited.

7. FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March31, 2014 -2017E
FY14A FY15A FY16E FY17E
EQUITY AND LIABILITES
Shareholder's Funds
Share Capital 52315.90 52315.90 52315.90 52315.90
Reserves and Surplus 292280.40 329350.00 378752.50 424202.80
1. Sub Total - Net worth 344596.30 381665.90 431068.40 476518.70
2. Deferred Revenue 45174.60 47629.10 49343.75 50824.06
Non Current Liabilities
Long term Borrowings 767902.20 893758.40 1001009.41 1101110.35
Deferred Tax Liabilities 24429.60 24721.50 25957.58 26736.30
Other Long Term Liabilities 13373.00 10978.80 9551.56 8596.40
Long Term Provisions 5243.70 5802.30 6359.32 6931.66
3. Sub Total - Non Current Liabilities 810948.50 935261.00 1042877.86 1143374.71
Current Liabilities
Short Term Borrowings 27000.00 12000.00 6600.00 5148.00
Trade Payables 3290.70 3929.70 4519.16 4971.07
Other Current Liabilities 155200.40 190403.60 218012.12 241993.46
Short Term Provisions 9680.20 12119.50 14179.82 15881.39
4. Sub Total - Current Liabilities 195171.30 218452.80 243311.09 267993.92
Total Liabilities (1+2+3+4) 1395890.70 1583008.80 1766601.10 1938711.39
ASSETS
Non Current Assets
a) Fixed Assets 1050054.80 1295684.00 1501814.91 1685036.33
b ) Construction Stores 176253.00 130419.60 104335.68 86598.61
c) Non-current investments 8143.30 7409.90 6891.21 6477.73
d) Deferred Foreign currency fluctuation 24905.70 28415.40 31541.09 33748.97
e) Long Term loans and advances 45529.90 41778.90 38854.38 36523.11
1. Sub Total - Non Current Assets 1304886.70 1503707.80 1683437.27 1848384.75
Current Assets
Current Investments 1843.50 1854.30 1917.35 2013.21
Inventories 7124.00 7177.50 7321.05 7613.89
Trade receivables 15784.60 21186.50 25000.07 28000.08
Cash and Bank Balances 44175.20 20629.80 16091.24 16843.99
Short-terms loans & advances 4720.40 5664.20 6627.11 7289.83
Other current assets 17356.30 22788.70 26207.01 28565.64
2. Sub Total - Current Assets 91004.00 79301.00 83163.83 90326.64
Total Assets (1+2) 1395890.70 1583008.80 1766601.10 1938711.39

8. Annual Profit & Loss Statement for the period of 2014 to 2017E
Value(Rs.in.mn) FY14A FY15A FY16E FY17E
Description 12m 12m 12m 12m
Net Sales 152302.80 171772.30 190151.94 208406.52
Other Income 4911.30 6028.10 6751.47 7453.63
Total Income 157214.10 177800.40 196903.41 215860.15
Expenditure -22944.60 -24259.30 -26431.12 -28551.69
Operating Profit 134269.50 153541.10 170472.29 187308.45
Interest -31675.20 -39793.20 -43971.49 -48192.75
Gross profit 102594.30 113747.90 126500.80 139115.70
Depreciation -39956.80 -50854.10 -56956.59 -62937.03
Profit Before Tax 62637.50 62893.80 69544.21 76178.67
Tax -17663.30 -13102.10 -13978.39 -15235.73
Net Profit 44974.20 49791.70 55565.82 60942.94
Equity capital 52315.90 52315.90 52315.90 52315.90
Reserves 292280.40 329350.00 378752.50 424202.80
Face value 10.00 10.00 10.00 10.00
EPS 8.60 9.52 10.62 11.65
Quarterly Profit & Loss Statement for the period of 30th Sept, 2014 to 30th June, 2015E
Value(Rs.in.mn) 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15E
Description 3m 3m 3m 3m
Net sales 41785.40 43536.20 47032.20 47784.72
Other income 1307.20 1324.90 2063.40 1588.82
Total Income 43092.60 44861.10 49095.60 49373.53
Expenditure -5986.70 -6135.00 -6447.70 -6503.50
Operating profit 37105.90 38726.10 42647.90 42870.03
Interest -9890.90 -10246.70 -10376.20 -10853.51
Gross profit 27215.00 28479.40 32271.70 32016.53
Depreciation -12116.30 -13006.90 -14180.60 -14691.10
Profit Before Tax 15098.70 15472.50 18091.10 17325.43
Tax -3086.00 -3183.40 -3966.30 -2945.32
Net Profit 12012.70 12289.10 14124.80 14380.10
Equity capital 52315.90 52315.90 52315.90 52315.90
Face value 10.00 10.00 10.00 10.00
EPS 2.30 2.35 2.70 2.75

9. Ratio Analysis
Particulars FY14A FY15A FY16E FY17E
EPS (Rs.) 8.60 9.52 10.62 11.65
EBITDA Margin (%) 88.16% 89.39% 89.65% 89.88%
PBT Margin (%) 41.13% 36.61% 36.57% 36.55%
PAT Margin (%) 29.53% 28.99% 29.22% 29.24%
P/E Ratio (x) 16.63 15.02 13.46 12.28
ROE (%) 13.05% 13.05% 12.89% 12.79%
ROCE (%) 15.29% 15.88% 15.81% 15.81%
Debt Equity Ratio 2.31 2.37 2.34 2.32
EV/EBITDA (x) 11.15 10.63 10.19 9.80
Book Value (Rs.) 65.87 72.95 82.40 91.08
P/BV 2.17 1.96 1.74 1.57
Charts

10. OUTLOOK AND CONCLUSION
At the current market price of Rs. 143.00, the stock P/E ratio is at 13.46 x FY16E and 12.28 x FY17E
respectively.
Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.10.62 and
Rs.11.65 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 10% over 2014 to 2017E
respectively.
On the basis of EV/EBITDA, the stock trades at 10.19 x for FY16E and 9.80 x for FY17E.
Price to Book Value of the stock is expected to be at 1.74 x and 1.57 x respectively for FY16E and FY17E.
We expect that the company surplus scenario is likely to continue for the next three years, will keep its
growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of
Rs.165.00 for Medium to Long term investment.

11. INDUSTRY OVERVIEW
Power or electricity is one of the most critical components of infrastructure affecting economic growth and well-
being of nations. The existence and development of adequate infrastructure is essential for sustained growth of
the Indian economy.
The Indian power sector is one of the most diversified in the world. Sources for power generation range from
conventional ones such as coal, lignite, natural gas, oil, hydro and nuclear power to other viable non-conventional
sources such as wind, solar, and agriculture and domestic waste. The demand for electricity in the country has
been growing at a rapid rate and is expected to grow further in the years to come. In order to meet the increasing
requirement of electricity, massive addition to the installed generating capacity in the country is required.
Market Size
The Indian power sector is undergoing a significant change that is redefining the industry outlook. Sustained
economic growth continues to drive power demand in India. The Government of India’s focus to attain ‘Power
For All’ has accelerated capacity addition in the country. At the same time, the competitive intensity is increasing
on both market side as well as supply side (fuel, logistics, finances and manpower). The Planning Commission’s
12th Plan expects total domestic energy production to reach 669.6 million tonnes of oil equivalent (MTOE) by
2016–17 and 844 MTOE by 2021–22.
By 2030 – 35, energy demand in India is projected to be the highest among all countries according to the 2014
energy outlook report by British oil giant BP.
As of April 2014, total thermal installed capacity stood at 168.4 gigawatt (GW), while hydro and renewable
energy installed capacity totalled 40.5 GW and 31.7 GW, respectively. At 4.8 GW, nuclear energy capacity
remained broadly constant from that in the previous year.
Indian solar installations are forecasted to be approximately 1,000 megawatt (MW) in 2014, as per Mercom
Capital Group, a global clean energy communications and consulting firm.
Wind energy market of India is expected to attract about Rs 200000.00 mn (US$ 3.16 billion) of investments
next year, as companies across sectors plan to add 3,000 MW of capacity powered by wind energy.
Investment
Around 293 global and domestic companies have committed to generate 266 gigawatts (GW) of solar, wind,
mini-hydel and bio-mass based power in India over the next 5-10 years. The initiative would entail an
investment of about US$ 310-350 billion.
The industry has attracted FDI worth US$ 9,548.82 million during the period April 2000 to February 2015.

12. Some of the major investments made into the Indian power sector are as follows:
• Inox Wind Ltd, a subsidiary of Gujarat Fluorochemicals and a wind energy solutions provider, plans to double
its manufacturing capacity to 1,600 MW at a total investment of Rs 2000.00 mn (US$ 31.64 million) by the
end of next financial year.
• Suzlon Energy Ltd announced that it has completed installing and commissioning 350 MW of wind energy in
Brazil. This combined capacity includes projects located in the high wind states of Rio Grande do Norte and
Ceara in Brazil.
• ACME Group plans to invest Rs 6000.00 mn (US$ 94.93 million) to develop 74 MW of solar photovoltaic (PV)
power projects in Punjab.
• The Dilip Shanghvi family, founders of Sun Pharma, plans to acquire a 23 per cent stake in Suzlon Energy
with a preferential issue of fresh equity for Rs 18000.00 mn(US$ 284.8 million).
• Reliance Power Ltd has signed an accord with the Government of Rajasthan to develop 6,000 MW of solar
power projects in the state over the next 10 years.
• Global private equity (PE) fund Actis will invest US$ 230 million to create an Indian renewable energy
platform, Ostro Energy, the fund said in a press release. Ostro Energy’s first project Tejuva—a 50.4 MW wind
project—is already under construction in Jaisalmer, Rajasthan.
Government Initiatives
The Government of India has identified the power sector as a key sector of focus to promote sustained industrial
growth.
The RE-INVEST 2015 which concluded on February 17, 2015, is a significant step in making India self-reliant in
energy. The three day RE-INVEST 2015 received 2,800 delegates participating from 42 countries and saw green
energy commitments worth 266,000 MW.
Some of the initiatives taken by the Government of India to boost the power sector of India are as follows:
A Joint Indo-US PACE Setter Fund has been established with a contribution of US$ 4 million from each side to
enhance clean energy cooperation.
The Government of India has announced a massive renewable power production target of 175,000 MW by
2022, comprising 100,000 MW from solar power, 60,000 MW from wind energy, 10,000 MW from biomass
and 5,000 MW from small hydro power projects.
The Union Cabinet of India has approved 15,000 MW of grid-connected solar power projects of National
Thermal Power Corp Ltd (NTPC).

13. The Indian Railways has signed a bilateral power procurement agreement with the Damodar Valley
Corporation (DVC). The agreement was signed between North Central Railway and DVC. This is the first time
the railways will directly buy power from a supplier.
US federal agencies have committed a total of US$ 4 billion for projects and equipment sourcing, one of the
biggest deals for the growing renewable energy sector in India.
A memorandum of collaboration (MoC) was signed in New Delhi on January 20, 2015 between the Indian
Institutes of Technology (IITs) and Oil & Natural Gas Corporation (ONGC) to work towards a collective
research and development (R&D) programme for developing indigenous technologies to enhance exploration
and exploitation of hydrocarbons and alternate sources of energy.
Road Ahead
The Indian power sector has an investment potential of Rs 15 trillion (US$ 237.35 billion) in the next 4-5 years,
providing immense opportunities in power generation, distribution, transmission and equipment, said Mr Piyush
Goyal, Union Minister of Coal, Power and Renewable Energy.
The immediate goal of the government is to produce two trillion units (kilowatt hours) of energy by 2019. This
will mean doubling the current production capacity in order to achieve provide 24x7 electricity for residential,
industrial, commercial and agriculture use.
Disclaimer:
This document is prepared by our research analysts and it does not constitute an offer or solicitation for the
purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients’ investment decision based on this document.

14. Firstcall India Equity Research: Email – info@firstobjectindia.com
C.V.S.L.Kameswari Pharma & Diversified
U. Janaki Rao Capital Goods
B. Anil Kumar Auto, IT & FMCG
M. Vinayak Rao Diversified
G. Amarender Diversified
Firstcall Research Provides
Industry Research on all the Sectors and Equity Research on Major Companies
forming part of Listed and Unlisted Segments
For Further Details Contact:
Tel.: 022-2527 2510/2527 6077 / 25276089 Telefax: 022-25276089
040-20000235 /20000233
E-mail: info@firstobjectindia.com
www.firstcallresearch.com